(1) Any item, other than real property, that is of a type customarily used by the general public or by non-governmental entities for purposes other than governmental purposes, and

(i) Has been sold, leased, or licensed to the general public; or
(ii) Has been offered for sale, lease, or license to the general public;

* * * * *

(3) Any item that would satisfy a criterion expressed in paragraphs (1) or (2) of this definition, but for--

(i) Modifications of a type customarily available in the commercial marketplace; or
(ii) Minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements. Minor modifications means modifications that do not significantly alter the nongovernmental function or essential physical characteristics of an item or component, or change the purpose of a process. . . .

FAR § 2.101.

Although Gichner focuses on the third paragraph of the FAR definition, we conclude that AAR’s shelter meets the definition of a commercial item based on the first paragraph. In this regard, the Army executed a commerciality determination that stated that ISO type shelters are regularly used by a variety of commercial industries for transportation, storage, and housing options, and therefore meet the criteria for commercial items. Hearing Book (HB), Tab 38, Army Commerciality Determination. Additionally, during the hearing we conducted, the assistant program manager responsible for the PQAS-E program stated that, as part of her market research, she found that AAR listed its PQAS-E shelter on its website for sale. Tr. at 94-95, 97-98. Subsequently, AAR confirmed that the PQAS-E shelter is offered on its website to the general public. AAR Post-Hearing Comments at 5; HB, Tab 39, AAR PQAS-E Shelter Sale Website.[10] Therefore, because the record shows that AAR’s PQAS-E shelter has been offered for sale to the public, we conclude that the Army reasonably determined that the shelter is a commercial item.  (Gichner Systems Group, Inc. B-414287, B-414287.2, B-414287.3: Apr 27, 2017)

Voith Hydro protests that the agency improperly concluded that the work required at the Folsom Power Plant, as set forth in RFP ‑0017, and the work required at the Nimbus Power Plant, as set forth in RFP ‑0021, primarily involved “construction,” as that term is defined in the FAR. In Voith Hydro’s view, the agency was required to issue the solicitations as commercial item acquisitions in accordance with part 12 of the FAR, rather than as negotiated acquisitions under part 15 of the FAR with certain clauses pertaining to the issuance of construction contracts under part 36 of the FAR.

Specifically, the protester argues that the actual items and services that are required to be furnished under the solicitation meet the definition of “commercial item” as set forth in the FAR. The protester first points out here that FAR sect. 2.101 defines “commercial item” as “[a]ny item, other than real property, that is of the type customarily used by the general public or by non-governmental entities for purposes other than governmental purposes,” which has been sold or offered for sale to the general public. The protester continues by noting that the FAR’s definition of commercial items specifically includes items that would satisfy the above definition “but for . . . [m]odifications of a type customarily available in the commercial marketplace,” as well as “[i]nstallation services, maintenance services, repair services, training services, and other services” as long as certain requirements are met. FAR sect. 2.101. The protester next provides a breakdown of each RFP by contract line item (CLIN), and in addition to calculating the approximate price associated with each CLIN, explains why, in its view, the particular CLINs must be considered commercial items, based primarily on the protester’s view that the particular items required under the majority of the CLINS set forth in each solicitation, as well as what the protester characterizes as “services,” are “of a type customarily available in the commercial marketplace.” The protester concludes here that because “[t]here is no doubt” that the majority of the RFPs’ CLINs constitute commercial items (or services), the work required at the Folsom Power Plant (RFP ‑0017) and the Nimbus Power Plant (RFP ‑0021) meets the definition of “commercial item” as set forth in the FAR, and the agency was thus without discretion to issue the solicitations as other than commercial item acquisitions in accordance with part 12 of the FAR. Protest (B‑401771) at 5; see Protest (B‑401244.2) at 16 (contending that “the vast majority of the value of this Solicitation involves items and services which indisputably meet the definition of a ‘commercial item’”). The protester further argues that, contrary to the agency’s view, neither the Folsom Power Plant project (RFP ‑0017) nor the Nimbus Power Plant project (RFP ‑0021) can properly be considered “construction” under the definition of that term in the FAR. See FAR sect. 2.101.

We have long held that the contracting agency has the primary responsibility for determining its needs and the best method of accommodating them, and that this principle applies to the contracting format used to purchase the items which the agency has determined necessary. Library of Congress--Obligation of Guaranteed Minimums for Indefinite-Delivery, Indefinite Quantity Contracts under the FEDLINK Program, B‑318046, July 7, 2009; James Foos & Assoc., B-249496.2, Jan. 6, 1993, 93‑1 CPD para. 22 at 2; see Mills Mfg. Corp., B‑224004; B‑224005, Dec. 18, 1986, 86-2 CPD para. 679 at 2. Our Office will not object to an agency’s determination in this regard unless the protester shows that it is clearly unreasonable. Crescent Helicopters, B‑284706 et al., May 30, 2000, 2000 CPD para. 90 at 2; James Foos & Assoc., supra.

FAR part 12 prescribes policies and procedures unique to the acquisition of commercial items and implements the preference established by, and the specific requirements in, the Federal Acquisition Streamlining Act of 1994, 41 U.S.C. sect. 264b (2006), for the acquisition of commercial items that meet the needs of an agency. FAR part 12 was intended to establish acquisition policies more closely resembling those of the commercial marketplace as well as other considerations necessary for proper acquisition planning, solicitation, evaluation, and award of contracts for commercial items. Crescent Helicopters, supra. FAR part 12 specifies the solicitation provisions and clauses to be used when acquiring commercial items.

Agencies are required to conduct market research pursuant to FAR part 10 to determine whether commercial items are available that could meet the agency’s requirements. FAR sect. 12.101(a). If market research establishes that the government’s needs can be met by a type of item (including services) customarily available in the commercial marketplace that would meet the definition of a commercial item at FAR sect. 2.101, the contracting officer is required to solicit and award any resulting contract using the policies and procedures in FAR part 12. FAR sections 10.002(d)(1), 12.102(a); Crescent Helicopters, supra, at 2-3. Determining whether or not a product or service is a commercial item is largely within the discretion of the contracting agency, and such a determination will not be disturbed by our Office unless it is shown to be unreasonable. Crescent Helicopters, supra, at 2.

The agency explains with regard to both of the RFPs that, in order to address the concerns by the protester in its initial protest (B-401244), the agency conducted market research by posting a request for information (RFI) regarding the project on the agency’s website and soliciting the views of the firms that had submitted proposals in response to RFP ‑0017. Specifically, the agency explains that in addition to posting the RFI on the agency’s website, it “submitted the RFI directly to the [DELETED] prospective bidders for the [Folsom Power Plant] project,” and received responses from two of the “major market participants.”  AR (B-401244.2) at 7.

One vendor commented, among other things, that “[t]his type of equipment requires a design build to match the wide range of customer requirements,” and explained in some detail as to why, in this vendor’s view, the work required was unique to the Folsom Power Plant. AR (B-401244.2), Tab E, [DELETED], at 1. In this regard, this vendor outlined a number of items that would need to be “design[ed]” or would involve “[c]ustom manufacturing” to meet the technical requirements of the solicitation, and that each of these processes “would entail several thousand hours.” Id. This vendor continued by explaining that the work required is “specific and unique to Folsom,” and, with regard to certain of the items required for the Folsom project, that “new tooling [will be] designed and manufactured” and “new programs [will be] written for the manufacturing” of the items required, and that “[u]pon completion of the job a majority of the tooling is scrapped or modified for other jobs.” Id. at 2-3. In response to a question asking whether the vendor had “established catalog prices . . . for this type of requirement,” this vendor commented that it did not, and explained that “[t]his type of equipment requires a design build to match the wide range of customer requirements.” Id. at 1. This vendor continued by explaining that “[t]hese products are sold as improvements and alterations to existing real property.” Id. On the other hand, this vendor, in detailing the numerous aspects of the work required under the RFP that would have to be “[c]ustom” or specifically designed and built for the Folsom Power Plant project, also answered “[y]es” to a question asking whether the “modifications” required for the Folsom Power Plant were “of a type customarily available in the commercial marketplace.” Id.

The other responding vendor answered a market research question asking whether the work required at the Folsom Power Plant could be characterized as commercial items by stating “[n]o.” AR (B-401244.2), Tab E, Andritz Hydro Response, at 1. This vendor continued by discussing another solicitation issued by the Army Corps of Engineers for work that the vendor characterized as “similar in nature” to the work required at the Folsom Power Plant, and concluding that based upon its experience with that solicitation as well as RFP ‑0017, “it is clear that concerns or questions that Voith raises about FAR 12 in the Folsom bid is their isolated opinion and their view is not shared by other vendors or manufacturers.” Id. at 1-2. This vendor also retained counsel and intervened in this protest, detailing its views as to why the agency’s needs at the Folsom Power Plant cannot be accomplished through a commercial item acquisition due to the number of items that are unique to the work required. Intervenor’s Comments at 1-5.

The record also includes a lengthy and detailed statement from an agency senior electrical engineer, explaining, for example, that RFP ‑0017 “is for the retrofitting of an existing hydroelectric facility by reusing some existing components, rewinding [refurbishing] and upgrading others, and providing some new components that must be custom made for the Project so that they will work with the existing components and dimensional constraints.” AR (B-401244.2), Tab I, Statement of the Agency Senior Electrical Engineer, at 2. This individual adds that “[i]n addition, the Project requires: a technical evaluation of the mechanical limitations of the existing generators that are going to be retrofitted; custom designed and installed equipment platforms and walkways; environmental work consisting of asbestos removal and a five-year extended warranty for the completed system.” Id. In addition to providing further detailed explanation as to why certain items of work involve “one-of-a-kind construction,” while others are “clearly site and job specific and must be customized for the Folsom job,” the senior electrical engineer concludes that the work required cannot be “bought pursuant to Part 12 of the FAR.” Id. at 2-3.

The record reflects that the agency also contacted a representative of the U.S. Department Labor (DOL) to obtain DOL’s views as to whether the provisions of the Service Contract Act, 41 U.S.C. sections 351-358 (2006), which generally covers services or maintenance work, or the Davis Bacon Act, 40 U.S.C. sections 276a-276a-7 (2006), which generally covers construction work, including alteration and repair work, were applicable to the solicitation. AR (B-401244.2) at 9; see Dismantlement and Envtl. Mgmt. Co., B-257632, Oct. 24, 1994, 94-2 CPD para. 151 at 3 n.3. The DOL representative found that RFP ‑0017 “did contain construction work and that the laborers involved would be covered under the Davis-Bacon Act, not the Service Contract Act.” AR (B‑401244.2) at 9. The agency points out that it estimates that “in excess of [DELETED] labor hours” of “onsite” work will be required to complete the work required under RFP ‑0017, and that although certain service work will be required, “these services were not the majority of the work and were not severable from the work because the contractor that designs the systems must provide training on that system.” Id.

The agency also points out that the FAR sect. 2.101 defines “construction” in relevant part as “[c]onstruction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property,” and that “[f]or purposes of this definition, the terms ‘buildings, structures, or other real property’ include, but are not limited to, improvements of all types, such as . . . dams [and] plants.” FAR sect. 2.101. The agency argues that in its view the dam, its power plant, and equipment installed therein, such as the generators and excitation system, fall within this definition of real property, and that such a view is consistent with the “Department of the Interior Real Property Financial Management Policy Guide,” which provides that “[r]eal property is defined as any interest in land, together with improvements, structures and fixtures, appurtenances, and improvements of any kind located thereon,” and specifically includes electrical utility systems and hydroelectric power generation within this definition. AR (B-401244.2) at 5; Tab G, Department of the Interior Real Property Financial Management Policy Guide, at 5.

Finally, the agency notes that, contrary to the protester’s characterizations, the agency is not procuring a number of individual items and services, but rather, a complete system that “requires a customized system design, fabrication and installation of multiple components to form a complete system which is unique for these units to meet the ratings and performance requirements of the solicitation.” Contracting Officer’s Statement (B-401244.2) at 4; see AR (B-401244.2) at 2. The agency also states that because “this system of integrated multiple components are customized in a unique manner to suit Folsom generators and specification requirements, there is no commercial product or modified commercial item, which could be used to fulfill the solicitation requirements.” Id.

We find the agency’s determinations that the work and items required under RFP ‑0017 should be acquired under a construction contract, and cannot be acquired as commercial items using part 12 of the FAR, to be a reasonable exercise of the agency’s discretion. Although the protester clearly disagrees, and has presented arguments as to why the agency’s market research and conclusions drawn from the market research results are flawed, as well as a detailed breakdown of the requirements of the solicitation and why, in the protester’s view, the requirements must be met through a commercial item acquisition, rather than through a negotiated acquisition under part 15 of the FAR with FAR part 36 construction contract clauses, these arguments fail to establish, based upon our review of the record, that the agency’s views are unreasonable. In this regard, we find reasonable the agency’s view that the market research responses can fairly be read as providing that while there are vendors that manufacture and install equipment similar to that being acquired here, such equipment would have to be custom manufactured or built based upon unique specifications to such an extent that it cannot be considered as commercial items or, when designed and built, cannot be considered “of a type” available in the commercial marketplace given the unique requirements of the complete system sought here. Additionally, as indicated above, the agency’s determination that the solicitation should be viewed as for construction, rather than for commercial items and services, is consistent with DOL’s views. Finally, in this regard, we cannot find unreasonable the agency’s determination that the work required constitutes construction, given, in addition to the views of DOL, the lengthy and detailed description of the work required to build the equipment and alter the power plant, including extensive on-site work involving substantial “construction” labor hours, in order to fulfill the requirements set forth in the solicitation.

As indicated, the contracting agency has the primary responsibility for determining its needs and the best method of accommodating them. Law Library of Congress--Obligation of Guaranteed Minimums for Indefinite-Delivery, Indefinite Quantity Contracts under the FEDLINK Program, supra. Based on our review of the record, the agency reasonably analyzed its needs and determined that this RFP should be for construction and was not an acquisition of commercial items. While it may be that the individual construction components here would be considered commercial items if acquired individually, see FAR sect. 2.101, we agree with the agency that the RFP here was for a construction project that used and integrated construction components, and is not for the acquisition of a commercial item.

The agency relied in part on the market research conducted and the DOL opinion obtained during the agency’s review of RFP ‑0017 in determining and defending its view that the work required at the Nimbus Power Plant, and solicited under RFP ‑0021, also cannot be acquired as commercial items or services and should be considered to be construction. Contracting Officer’s Statement (B-401771) at 3-5. The agency also similarly determined with regard to RFP ‑0021 that while “[i]ndividually some of the components may be commercially available . . . however it is only through the effective combined integration of these components that a complete workable system can be achieved,” and that “[t]here is no commercial system available which with minor modifications (or for that matter with major modifications), could meet [the agency’s] specification requirements” for the excitation system for the Nimbus power plant. Contracting Officer’s Statement (B‑401771) at 2.

The protester makes arguments with regard to the terms of RFP ‑0021 similar to those it made in challenging the terms of RFP ‑0017. The protester also argues that the agency erred in considering the market research conducted in connection with RFP ‑0017 in determining that RFP -0021 was not a commercial item acquisition under part 12 of the FAR, given the difference in the estimated cost of the two projects (RFP -0017 estimated at more than $10 million and RFP ‑0021 estimated at $1 million to $5 million), and the fact that the “type of work and products being acquired are different.” Protester’s Comments (B-401771) at 10; RFP -0017 (Standard Form (SF) 1442) at 1; RFP ‑0021 (SF 1442) at 1. With regard to the difference in work, as indicated, RFP -0021 requires that the successful contractor remove, furnish and install excitation systems, as opposed to removing, furnishing, and installing excitation systems and generators under RFP -0017.

We find that the agency acted reasonably in considering the market research conducted with regard to RFP ‑0017 in considering the appropriate terms to include in RFP‑0021. In this regard, although the requirements in the solicitations differ, they are similar, and the FAR expressly authorizes the review “of the results of market research undertaken to meet similar or identical requirements.” FAR sect. 10.002(b)(2)(ii). Additionally, the record reflects that the agency considered the work solicited under RFP ‑0021, and determined that “the work associated with removing, modifying, disposing, furnishing, installing, and testing constituted . . . 79% of the total estimated value,” and that the approximately [DELETED] hours of on-site work involved would be performed by “foreman and high voltage workers which are labor categories under the Davis Bacon Act.” Contracting Officer’s Statement (B‑401771) at 5. The agency reports that because of this, it determined that “the work would be treated as construction and thus a construction contract was the most suitable.” Id.

Again, we find that Voith Hydro’s protest challenging the terms of RFP ‑0021, while clearly evidencing the protester’s disagreement with the agency’s position, does not show that the agency’s determination not to issue the solicitation under part 12 of the FAR, and to issue this solicitation as providing for a construction contract under parts 15 and 36 of the FAR, was unreasonable. As described above, the agency’s analysis of its needs and the best method of accommodating them was, in our view, thoughtful and based on appropriate market research.  (Voith Hydro, Inc., B-401244.2; B-401771, November 13, 2009) (pdf)

The RFP sought offers for commercially available hardware and software assistive technology (AT)[1] and support services (such as integration with existing technology, installation, training, hardware maintenance and software support) for qualified disabled individuals at the IRS. Among other things, offerors were to propose a Braille Display System (which had to be compatible with the JAWS software), see RFP amend. 1, at 45, and a “commercially available” LCD color monitor. Id. at 43. As amended, the RFP defined commercially available to be:

“Commercially available hardware and software” shall mean AT products that meet the criteria set forth in Federal Acquisition Regulation (FAR) Subpart 2.1--Definitions for “commercial component”, “commercial computer software” and “commercial item.”

EVAS argues that ITG’s proposal should have been rejected because ITG’s proposed monitor is not “commercially available.” In this regard, EVAS asserts that ITG’s proposed monitor has not been produced by the manufacturer for nearly a year and that the protester was informed that the monitor was “out of stock,” “obsolete,” or “discontinued” when it attempted to purchase the monitor from the manufacturer or resellers.

As noted above, the RFP, as amended, informed offerors that the definition of “commercial item” in FAR sect. 2.101 would be used to determine whether an offered item was “commercially available.” See RFP amend. 1, at 5. The FAR defines an item to be commercially available if it “is of a type customarily used by the general public” and “has been sold, leased, or licensed to the general public.” FAR sect. 2.101. Here, it is not disputed that ITG’s monitor is of a type customarily used by the general public and has been sold to the general public. Neither the FAR definition, nor any other requirement in the solicitation, requires that an offered item either must be in current production, or must currently be sold to the general public. Therefore, we find reasonable the agency’s determination that ITG’s monitor was “commercially available.”

Despite the fact that ITG’s offered monitor satisfied the amended solicitation’s definition of “commercially available,” the protester argues that the IRS itself found ITG’s monitor to be “commercially non-available,” noting that during discussions the IRS informed ITG that the awardee’s monitor did not meet the section 508 standards for the most compliant product “currently available in the marketplace.” This argument, however, is without merit. Whether ITG’s monitor satisfied the section 508 standards for the most compliant product “currently available in the marketplace” has nothing to do with whether the monitor is commercially available. In any event, as noted above, the agency found following discussions that ITG’s proposal satisfied the section 508 standards. See AR, Tab L.2, Final Technical Evaluation Report, at 4.  (Electronic Vision Access Solutions, B-401473,  August 25, 2009)  (pdf)

Spika’s quotation, as well as information Spika submitted in response to the agency’s corrective action and during the course of this protest, establish that Spika has not manufactured the platforms that are the subject of this RFQ, but rather, has manufactured other aircraft maintenance platforms, as well as some of the components comprising the subject platforms. AR, Tab 8, Spika Quotation, at 5-6; Tab 16, Spika Letter to Contracting Officer (Oct. 15, 2007); Agency Supp. Report at 11; Tab 2, Spika E-mail (May 23, 2008). However, the record also reflects that Spika has offered the subject platforms for sale to private firms, as well as to the government through a response to a previous solicitation, and that Spika’s quotation included product brochures regarding the subject platforms. AR, Tab 8, Spika Quotation, at 12-23; Agency Supp. Report, Tab 2, Spika E-mail (May 23, 2008); Tab 4, Spika Letter to GAO (Nov. 26, 2007), at 11; Tabs 7-9, Spika Letters to Potential Commercial Customers. Additionally, as pointed out by the agency, Spika’s platforms are “based on non‑patented and non‑proprietary maintenance platform designs that have been in service in maintenance facilities throughout the Untied States.” AR at 15; Tab 16, Spika Letter (Oct. 15, 2007).

As indicated above, actual sale of an item to the general public is not required for an item to be considered a commercial item and the record shows that Spika has in fact offered these platforms for sale to commercial entities. See Coherent, Inc., supra, at 2-3. Although the above-quoted question and answer referenced by the protester suggests that the platforms quoted should be “in use,” that language must be considered in the context of the solicitation read as a whole. See SRI Int’l, Inc., B‑250327.4, Apr. 27, 1993, 93‑1 CPD para. 344 at 6 n.5 (solicitations are read as a whole and in a manner that gives effect to all provisions of the solicitation). That is, the solicitation includes the commercial item language (which does not require that the item quoted have been actually sold to the general public or that it be “in use”), as well as the section of the solicitation that allows for the submission of quotations from vendors whose platforms are “not currently available,” and provides for the “delivery of required maintenance stands once [agency] review/approval of engineering drawings has been conducted and provided to vendor.” See RFQ at 5. Thus, given that Spika has offered these platforms for sale to commercial entities, we have no basis on this record to question the agency’s determination that Spika is offering a commercial, non‑developmental item in compliance with this solicitation requirement that one be supplied. See Coherent, Inc., supra.  (Precision Lift, Inc., B-310540.4, June 26, 2008) (pdf)

As required by the RFP, the Mobiam proposal identifies which technical requirements were standard COTS software functions and which requirements would require minimal configuration. Id. at 27. Further, Mobiam, in its proposal, provided three references, two of which were using Mobiam’s FirstServe software in healthcare environments, primarily radiology centers, that required that the software be used for patient scheduling, administration, file management, and financial management. AR, Tab 7.1, Mobiam’s Past Performance Proposal, vol. III, at 6. These are the types of functions covered by this RFP. One reference involved a $350 million healthcare provider that offered outpatient services to over 1 million patients per year at almost 100 locations throughout the United States and the other involved a $450 million healthcare provider that offered outpatient services for over 1 million patients per year at 450 centers throughout the United States. The record shows that the Mobiam product has been fielded successfully in the healthcare environment. Further, contrary to the protester’s contention that the agency did not evaluate whether Mobiam’s solution was a COTS product, the record shows that there were discussions by the SSEB concerning whether Mobiam’s and the other offerors’ proposed solutions were COTS products. Ultimately, the SSEB determined that all of the offerors, including Mobiam and Cerner, whose proposals were in the competitive range, proposed COTS products. The evaluators recognized that COTS software would not meet all of the RFP requirements initially because all vendors would have to perform some software configuration. (Cerner Corporation, B-293093; B-293093.2, February 2, 2004) (pdf)

NABCO complains that the Air Force did not formally evaluate, or document, whether UXB’s (and the other offerors’) proposed TCV was a commercial item at the time of the evaluation. However, there is no requirement in the FAR that agencies formally evaluate or document whether an offered item is a commercial item when using commercial item procedures, and the protester has not provided any authority for its belief that such an analysis is required. In any event, as the agency explains, even though it did not undertake a formal analysis of proposals to determine whether the items proposed were in fact commercial items, it did have a belief, based on its market research, that the items proposed were commercial, and nothing in the offerors’ proposals, and in particular UXB’s, suggested that the items proposed were not commercial items. In making award to UXB, the agency further argues, it made a de facto determination that the item upon which award was made was a commercial item. Tr. at 67-68, 96-97, 254-55. Given that the record otherwise demonstrates that UXB’s proposed MECV-L is indeed a commercial item, we cannot find the agency’s actions in this regard objectionable.  (NABCO, Inc., B-293027; B-293027.2, January 15, 2004) (pdf)

Here, the record shows that the Forest Service concluded, based upon an informal market survey, that these tree thinning services qualify as a commercial item because the services are not unique, are not used exclusively by the government, and are offered and sold competitively by forestry and nursery firms. For example, the Forest Service reports that there were more than 150 potential offerors on the mailing list for the services, that the local telephone book contained numerous sources for tree thinning services, and that the agency has personal knowledge of several commercial companies engaged in various types of tree services. SHABA does not dispute any of these findings. Thus, there is no basis to object to the agency's determination that these services constituted a commercial item and were required to be solicited under FAR part 12.  (SHABA Contracting, B-287430, June 18, 2001)